Question 1

A decrease in demand will cause a(n)

Accepted Answer

A decrease in demand means that consumers are buying less of a product, which leads to an oversupply of the product. This excess supply will cause sellers to lower the price in order to attract more buyers and clear their inventory, resulting in a decrease in equilibrium price.

Question 2

Velcro is becoming more and more popular for a variety of uses,including as fasteners for shoes.What should happen to the equilibrium price and quantity for shoelaces as a result?

Accepted Answer

The answer of Velcro is becoming more and more popular...

Question 3

If the tea harvest is bad in a particular year,the supply of tea will

Accepted Answer

If the tea harvest is bad in a particular year, the supply of tea will decrease. With a decrease in supply, the price of tea will increase. As a result, the quantity demanded of tea will decrease. This will cause consumers to shift to substitute goods like coffee, which will increase the demand for coffee. So, the quantity demanded of coffee will increase, but the price of coffee may also increase due to increased demand. Therefore, a bad tea harvest will lead to a decrease in the supply of tea, an increase in the price of tea, a decrease in the quantity demanded of tea, an increase in the quantity demanded of coffee, and a possible increase in the price of coffee.

Question 4

An increase in demand will cause a(n)

Accepted Answer

An increase in demand will lead to an increase in the quantity of the product that suppliers are willing to supply, as they can charge a higher price and make more profit. This is known as an increase in quantity supplied, which is different from an increase in supply, as supply refers to the entire curve of possible combinations of price and quantity that a supplier is willing to sell at. Therefore, the correct answer is D, an increase in quantity supplied.

Question 5

The effect of an increase in consumer income on equilibrium price and quantity of Florida orange juice (a normal good)is

Accepted Answer

The answer of The effect of an increase in consumer...

Question 6

If the demand for bicycles increases,

Accepted Answer

The answer of If the demand for bicycles increases,
...

Question 7

A rightward shift of a supply curve

Accepted Answer

The answer of A rightward shift of a supply curve
...

Question 8

The market for chewing gum is competitive with a current price of 50 cents per pack and quantity of 100,000 packs.Which of the following events would lead to a new equilibrium price of 40 cents and quantity of 80,000 packs?

Accepted Answer

The answer of The market for chewing gum is competitive...

Question 9

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes.If these attempts are successful,what will happen to the equilibrium price and quantity of potatoes?

Accepted Answer

The answer of Attempts are being made to develop a...

Question 10

A decrease in demand will result in a(n)

Accepted Answer

If there is a decrease in demand, it means that consumers are less willing or able to buy the good at the same price. This translates into a surplus of the good, as producers are producing more than what consumers are willing to buy. To get rid of the surplus, producers have to lower the price to incentivize consumers to buy more. The new equilibrium will be at a lower price and quantity than before.

Question 11

Refer to Exhibit 4-2.Which of the following would cause a shift of demand from D' to D?

Accepted Answer

A decline in consumers' incomes if it is a normal good would lead to a shift of demand from D' to D, as consumers would be less willing and able to purchase the good at the same price.

Question 12

For a given supply curve,an increase in demand will typically

Accepted Answer

An increase in demand coupled with a fixed supply curve will result in a shift of the demand curve to the right, resulting in an increase in both quantity and price. This is due to the fact that as demand increases, suppliers will have to produce more to meet the increasing demand, resulting in an increase in quantity supplied. This increase in quantity supplied will lead to an increase in price, as suppliers may charge more for the additional units produced. Thus, both quantity and price typically increase when demand increases on a fixed supply curve.

Question 13

Suppose that the price of compact disks (CDs)increases,other things equal.Which of the following in the most likely effect in the market for DVDs?

Accepted Answer

If the price of CDs increases, consumers may be more inclined to purchase DVDs instead, leading to an increase in demand for DVDs. This is because CDs and DVDs are substitute goods, meaning that they can be used for the same purpose (i.e., listening to music or watching movies). As the price of CDs increases, the price of DVDs becomes relatively lower and more attractive to consumers, thereby increasing demand.

Question 14

If the tea harvest is bad in a particular year,what will happen in the market for coffee?

Accepted Answer

The answer of If the tea harvest is bad in...

Question 15

In Exhibit 4-2,which of the following could not cause the shift from D to D'?

Accepted Answer

The answer of In Exhibit 4-2,which of the following could...

Question 16

What is the effect of a decrease in the price of potato chips on the market for pretzels?

Accepted Answer

The answer of What is the effect of a decrease...

Question 17

Which of the following would cause both the equilibrium price and equilibrium quantity of cookies to decrease?

Accepted Answer

The answer of Which of the following would cause both...

Question 18

An increase in demand for chocolate chips would usually result in a(n)

Accepted Answer

An increase in demand for chocolate chips would shift the demand curve to the right, leading to a higher equilibrium price and a higher equilibrium quantity. This is because at the initial equilibrium price, there is excess demand for chocolate chips, which would lead to an increase in price until the demand and supply are balanced again at a new equilibrium point with a higher price and quantity.

Question 19

Exhibit 4-2 
-Refer to Exhibit 4-2.A shift from demand curve D to D' illustrates a(n)

Accepted Answer

The shift from demand curve D to D' illustrates an increase in demand, as it represents a movement of the entire demand curve to the right, indicating that consumers are willing to buy more at each price point.

Question 20

The market for chewing gum is competitive with a current price of 50 cents per pack and a quantity of 100,000 packs per day.Which of the following events would lead to a new equilibrium price of 75 cents and a new equilibrium quantity of 125,000?

Accepted Answer